Meta Plans 30% Cut to Metaverse Budget as Reality Becomes Less Virtual: Bloomberg
Horizon Worlds and Quest are facing layoffs as Meta retreats further from its $70 billion bet on virtual reality, people familiar with the matter told Bloomberg.
Updated Dec 4, 2025, 5:10 p.m. Published Dec 4, 2025, 4:32 p.m.
Meta (META) may be pulling back even further from the metaverse it once bet its future on.
Executives are discussing budget cuts of up to 30% at the company’s metaverse division in 2026, according to a Bloomberg report citing people familiar with the talks. The unit includes Horizon Worlds, Meta’s social virtual reality (VR) platform, and its Quest headset unit. The cuts would include layoffs, the report said.
Meta founder and CEO Mark Zuckerberg reportedly asked all departments to find 10% in cost savings, a standard request during recent budget cycles. But the metaverse team was asked to go deeper, Bloomberg said, in part because the broader tech industry has not embraced the metaverse as fast or as fully as Meta once expected.
The biggest reductions are expected to fall on the virtual reality group, which accounts for the majority of metaverse-related spending. Horizon Worlds is also likely to see cuts.
Meta shares rose 4% on Thursday following the report. The stock is up over 10% year-to-date.
The metaverse refers to a collection of interconnected virtual worlds where people can work, play, and socialize using digital avatars, often through virtual reality headsets. At its peak, the idea captured Silicon Valley’s imagination and companies scrambled to stake out real estate in VR spaces, buy up blockchain-based assets and pitch new tools for a fully immersive internet.
Meta leaned in harder than anyone. The company rebranded from Facebook to Meta in 2021, committing tens of billions of dollars to what Zuckerberg called the “next frontier” of computing.
But user adoption fell short, and the tech world shifted focus. Apple moved toward spatial computing with the Vision Pro, Microsoft scaled back its own mixed-reality plans, and AI became the new battleground.
Meta’s metaverse group belongs in the Reality Labs division at the company, which has lost more than $70 billion since the start of 2021, Bloomberg said.
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